How to Manage Your Income as a Social Media Manager (When It’s Inconsistent)
A question we consistently get in our Slack DMs inside our Mentorship program for social media managers is "How do I manage my income?"
One of the biggest perks of being a freelancer is the flexibility, but on the downside of that, it's really flexible income, too. Living paycheck to paycheck, even in your own business, does exist. And, we don't want that for you!
One month you land three new clients, the next month one drops off, and suddenly your bank account feels like a rollercoaster, especially if you're coming from a salaried job or W2 role. This is a hard transition! But you can create this same consistency and balance in your own business, too. You shouldn't have to feel like you're watching your bank account like a hawk every day as a business owner; you should have more important things on your brain (like Iced Coffees and happy things we mean)
With the right systems in place, you can smooth out the ups and downs of inconsistent income and feel confident in your finances, so you don't have a month of canceling all your tools and straight panic. Here's how:
How to Manage Your Income as a Social Media Manager (When It’s Inconsistent)
Separate Business and Personal Finances
This is why we are huge advocates for creating LLCs for your freelancing business, because this can keep things more organized when it comes to finances. And no, we aren't legal or accounting experts here, so feel free to check in with your legal department to help decide if this is right for you. But, keeping your business income and expenses in their own account can be really helpful no matter what. This makes it easier to track what’s actually coming in, set aside money for taxes, and avoid the confusion of mixing personal spending with business deposits.
Know Your Numbers
You need to know what you’re working with! If you are already established, track your income for at least 3–6 months to find your average. Look at:
Your highest-earning months
Your lowest-earning months
Find your true monthly average
Once you have that baseline, you’ll be able to plan better for those highs and lows. Keep in mind, year over year is going to look different; this is just about finding the general trends. If you're brand new to freelancing, this is where forecasting and goal setting will become important, and start to track your income from the start of your first client will be super important!
Set Up A Salary
As business owners, we are constantly putting ourselves on the back burner. But when it comes to a paycheck, it's not an option. You need to prioritize your paycheck like you would for a team member, so set a salary for yourself that's consistent. This way, in slower months, you can still pay yourself the same amount and avoid financial stress on a personal level, too.
Find your Operating Expenses + Overhead Costs
Every business has operating expenses, even if you are just starting out. These are the non-negotiables to simply run your business, so think of software, tools, outsourcing, etc. This could be your bookkeeper, your computer, your Canva account, or even your Wifi expenses. Make sure you have a good idea of what those expenses look like every month. Altogether, this makes up your overhead costs, which is the baseline you need each month to run your business. This can help you set your pricing, help you strategize your income goals, and help you not see that bank account at total zero.
Emergency Fund + Savings
Let's talk about our least favorite subject: Taxes. These aren't optional, and nothing hurts more than scrambling to pay a giant tax bill in April. Set aside 25–30% of your income each month into a separate account so you’re always covered, because this is one category of your business you can't sleep on even a little! Another thing that can be helpful to separate is an emergency fund. This is your breathing room if you lose a client unexpectedly or need to cover expenses during a dip in work. A good rule of thumb is to set aside 3 months' worth of income into this bucket, so you can cover your costs if you lose that huge client!
Track all your finances
Again, not only does this make tax time easier, but this will also help you every single day of your business. You have to track your finances in your business so you know exactly how much you're making and where it's going. As Liz, our bookkeeping expert inside our mentorship for social media freelancers, has taught us, bookkeeping is not an option!
Consider using tools like QuickBooks, Wave, FreshBooks, or even a Google Drive folder (securely!) to help you keep track of what's going in + out and receipts. And, don't be afraid to outsource this if you need to. If you're a creative, it's okay to find someone who complements you with the numbers part.
Have questions on this? Join us inside our mentorship program, where you can ask us anything, listen to guest experts, and gain instant access to your portal with helpful tips just like these (and a lot more!). What are you waiting for? Your dream business isn't planning itself!!!